Posted By Andrew Michler On February 18, 2011 @ 12:45 pm In Renewable Energy,Solar Power | No Comments

The thriving solar electric industry in Colorado just came to a screeching halt as the largest utility and main provider of renewable energy rebates in Colorado, Xcel Energy[1], effectively halted all rebate applications. The startling news caught the renewable energy industry off guard, and has the potential to eliminate many of the companies that used the rebate program to guarantee predictable electricity cost to consumers. The rebate program was the first in the nation adopted by voter ballot that would make renewable energy mainstream in the state. Xcel’s actions completely undermine the public’s intention for a vibrant Colorado solar industry[2] and puts thousands of solar energy jobs at risk.

Ammendment 37[3] was passed by Colorado voters in 2004 and required that public utility companies set aside money for a renewable energy portfolio. A small percentage of that power needed to be installed on consumer roofs where demand was great. Many companies opened shop or grew as the price of solar [4]was cut nearly in half. As prices for solar equipment fell, and Xcel Energy met Ammedments 37′s requirements, they have gradually been able to lower the rebate amount to balance the total cost, while still maintaining a predictable pricing scheme for customers. The rebate money comes from a 2% charge on rate payer bills.

Xcel Energy, based in Minneapolis, Minnesota, is the largest energy provider in Colorado and their announcement[5] vastly curtails the available funds until a Commission ruling – not likely to come until May. A fixed amount of available solar was claimed in 24 hours, and current REC payments to energy providers have been slashed from $0.35 to a penny.

While the solar industry was relying on a stepped approach for reducing the rebates, their sudden elimination has put nearly every planned residential and commercial project on hold. Being a capital heavy industry many solar company’s cash flow will be severely restricted, limiting opportunities for distributed generation.

One such project that was finalized the day of the announcement puts solar panels on the Denver Rescue Mission[6] by the nonprofit Atmosphere Conservancy[7] in order to help them reduce energy costs. Executive Director Alex Blackmer said that three solar projects the Atmosphere Conservancy finalized would have to be renegotiated and may not go forward after the announcement. Hundreds of halted projects will result in real job losses for a workforce that today totals more than 5,300 people and growing. Early estimates reveal that half of these jobs will be gone – more than the total number of jobs in the coal industry in the state.

Xcel Energy’s sudden decision harkens back to when solar was first introduced to the state during the burgeoning solar thermal market [8]in the late seventies which quickly grew and died. The promise of reliable, clean and forward thinking energy is again threatened by an unstable market that Colorado voters[9] instead hoped to see thrive.